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Williams Partners (WPZ) Turns Around in Q3, Earnings Beat

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Williams Partners L.P.’s (WPZ - Free Report) third-quarter 2016 earnings of 42 cents per limited-partner unit comfortably surpassed the Zacks Consensus Estimate of 25 cents per limited-partner unit. The partnership had incurred a loss of 32 cents per limited-partner unit in the year-ago quarter.


Total revenue increased 6.4% year over year in the quarter to $1,907 million from $1,792 million.

Williams Partners' distributable cash flow (DCF), associated with partnership operations in the reported quarter, was $795 million as against $754 million in the year-ago quarter. Recently, the partnership announced a regular quarterly cash distribution of 85 cents per unit.

Segment Performance

Consolidated adjusted segment profit was $1,189 million, up 8.1% from the year-ago level of $1,100 million.

Central: The Central operating area includes operations that were part of the former Access Midstream segment. The segment reported profits of $246 million compared with $230 million in the prior-year quarter.

Northeast G&P: The segment recorded profits of $214 million as against $208 million in third-quarter 2015. The improved results are primarily driven by lower operating and G&A expenses as well as higher fee-based revenues.

Atlantic-Gulf: The segment reported profits of $427 million compared with $414 million in the year-ago quarter. The upside was primarily due to higher fee-based revenues from both offshore gathering and processing operations including the new Gunflint and Kodiak facilities as well as Transco’s new expansion projects.

West: Segmental profit was $166 million as against $161 million a year ago.

NGL & Petchem Services: The segment reported profits of $136 million compared with $85 million in the year-earlier quarter.

WILLIAMS PTR LP Price, Consensus and EPS Surprise

 

WILLIAMS PTR LP Price, Consensus and EPS Surprise | WILLIAMS PTR LP Quote

Guidance

In view of the shift in capital spending by Williams Partners from Transco and related Northeast G&P to revised Atlantic Sunrise in-service date as well as new projects and other changes, the partnership expects total growth capital and investment expenditures in 2017 between $2.1 billion and $2.8 billion. This includes total growth capital for Transco, which is expected to be between $1.4 billion and $1.9 billion.

Williams Partners expects Atlantic Sunrise to be brought online partially by the second half of 2017 and expects it to be fully commissioned by mid-2018.

Zacks Rank

Williams Partners currently has a Zacks Rank #2 (Buy).

Some better-ranked players from the same sector are Enbridge Inc. (ENB - Free Report) , Braskem SA (BAK - Free Report) and TransCanada Corporation (TRP - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enbridge Inc. reported a negative earnings surprise of 10.00% in the prior-year quarter.
 
TransCanada posted a positive earnings surprise of 22.92% in the last reported quarter.

Enviva Partners has a mixed earnings surprise history. The partnership posted positive earnings surprises in two of the last four quarters. It reported a positive earnings surprise of 20.51% in the preceding quarter.

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